OUTLOOK '18: Historically high European MIBK may fall in 2018

28 December 2017 15:19 Source:ICIS News

LONDON (ICIS)--European methyl isobutyl ketone (MIBK) prices have been firm throughout 2017 and there is room for decreases in 2018 due to the relatively high spot levels.

European MIBK prices are also at almost historically high levels which gives more scope for buyers to negotiate lower prices going forwards.

In the longer term, the outlook for demand is quite strong due to the healthy outlook for the European economy in 2018, with the European Commission predicting close to 2% GDP growth in the eurozone.

However, spot remains a minor component of the European MIBK market for structural reasons, with major changes unlikely in 2018 due to the mature situation in Europe.

The majority of material is expected to continue to be sold on the contract market.

There are also no capacity expansions in Europe on the horizon, with the market expected to remain dominated by a relatively small number of players, including Shell and

Arkema in Europe and imports from various sources.

Feedstock crude oil and naphtha trends are broadly expected to be firm in at least in the first half of 2018 compared to 2017, according to market sources, which is also likely to create some degree of upward pressure on MIBK prices.

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By Chris Barker